Securitisation

Securitisation Pools are designed for pooling together a group of underlying loans or receivables and distributing the incoming cashflows from those assets to investors based on a tiered structure.

Unlike Term Loan Pools, these do not follow a fixed repayment schedule. Instead, repayments to investors depend entirely on actual collections from the asset pool — including principal repayments, interest payments, early repayments, or recoveries from defaults.

Key Features:

• Cashflow-Driven Repayments Instead of following a fixed repayment schedule, repayments in these pools are made as cash is received — whether from interest, principal repayments, prepayments, or recoveries. This makes them suitable for portfolios where cashflows are variable or seasonal.

• Tranche-Based Investment Structure These pools are always multi-tranched, starting with:

  • Senior Tranche: Receives repayments first and is more protected from losses.

  • Junior Tranche: Paid after senior obligations are met and absorbs losses first, offering potentially higher returns.

• Flexible Waterfall Distribution The distribution of cashflows between tranches follows a predefined waterfall mechanism, which governs who gets paid, when, and how much:

  • Sequential Waterfall: All interest and principal payments go to the Senior tranche until it’s fully paid; only then does the Junior tranche start receiving distributions.

  • Pro-Rata Waterfall: Interest is shared proportionally between tranches, while principal is still prioritized to Senior first.

This structure offers investors the ability to choose between lower-risk, stable returns (Senior) or higher-risk, higher-reward positions (Junior), depending on their risk appetite.